Journal of Chinese EntrepreneurshipEmployability, skills and talent management in Zhejiang ProvinceXiaoxian Zhu Paul Iles J ohn ShuttArticle information:To cite this document:Xiaoxian Zhu Paul Iles J ohn Shutt, (2011),"Employability, skills and talent management in ZhejiangProvince", J ournal of Chinese Entrepreneurship, Vol. 3 Iss 1 pp. 24 - 35Permanent link to this document:http://dx.doi.org/10.1108/17561391111106007Downloaded on: 04 May 2015, At: 19:03 (PT)References: this document contains references to 17 other documents.To copy this document: permissions@emeraldinsight.comThe fulltext of this document has been downloaded 2397 times since 2011*Users who downloaded this article also downloaded:Staffan Nilsson, Per-Erik Ellstrm, (2012),"Employability and talent management: challenges forHRD practices", European J ournal of Training and Development, Vol. 36 Iss 1 pp. 26-45 http://dx.doi.org/10.1108/03090591211192610Vlad Vaiman, Hugh Scullion, David Collings, (2012),"Talent management decision making", ManagementDecision, Vol. 50 Iss 5 pp. 925-941 http://dx.doi.org/10.1108/00251741211227663Dmitry Kucherov, Elena Zavyalova, (2012),"HRD practices and talent management in the companieswith the employer brand", European J ournal of Training and Development, Vol. 36 Iss 1 pp. 86-104 http://dx.doi.org/10.1108/03090591211192647Access to this document was granted through an Emerald subscription provided by 543096 []For AuthorsIf you would like to write for this, or any other Emerald publication, then please use our Emerald forAuthors service information about how to choose which publication to write for and submission guidelinesare available for all. 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The organization is a partner of the Committeeon Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archivepreservation.*Related content and download information correct at time of download.Downloaded by FUDAN UNIVERSITY At 19:03 04 May 2015 (PT)Employability,skillsand talentmanagement in Zhejiang ProvinceXiaoxian Zhu and Paul IlesSalford Business School, University of Salford,Salford, UK, andJohn ShuttLeeds Business School, Leeds Metropolitan University,Leeds, UKAbstractPurposeThe purpose of this paper is to report on a three-year PMI2 project for the British Council in2008, one of seven to develop and strengthen partnerships with Chinese institutions in employabilityand entrepreneurship. Involving a partnership between Leeds Metropolitan University England and theZhejiang University of Technology Hangzhou, China, the aim has been to analyse the Hangzhou andZhejiang economies and examine current Chinese company requirements for skills and talent and theirimplicationsforteachingandlearningandgraduatesupply. Thiswasintendedtostrengthentheexisting partnerships at a civic level between Leeds and Hangzhou and the successful MAin Trade andFinance run by the two universities.Design/methodology/approachThepaperdrawsonpreliminaryinterviewstudiesinChinaofHangzhoucompaniesindifferent industrial sectorstoanalysetheskill andtalent needsof suchcompanies, their demands for graduate talent in particular and their views about the adequacy of thesupply of that talent from local and national universities.FindingsThe paper claries the relationship between talent demand and supply in China, especiallywithregardto graduatetalent, andpresentsanoriginalanalysisoftheskillneedsof theHangzhoueconomy.Originality/valueThe paper suggests ways in which universities in Zhejiang and China generallycould strengthen their engagement with businesses over talent demand and supply, and howthey coulddevelopcourses andprogrammes that more effectivelybridge the gapbetweenuniversities andbusinesses.Keywords China, Private sector organizations, Skills, Graduates, Management effectivenessPapertype Research paperIntroductionChina is seeking to change its industrial structure byimportingmore advancedtechnologiesandimprovingtheskillsofitsworkforcetodevelopagreaterfocusonvalue-addedexportstrategiesandmoveawayfromalow-costeconomy. Thereare,however, worries that the shortage of managerial/professional talent could hold backChinas economic growth. China is using the current international nancial crisis as onopportunity not only to respond to the crisis but also to accelerate the rebalancing andrestructuringofitseconomy.Thisrebalancingrequiresreducingexportdependence,slimmingthecurrent account surplusandrelyingmoreondomesticconsumption.Chinawill havetocompetemoreandmoreinareaswherethestressisonhighervalue-addedproducts, state-of-the-art facilitiesandhighlyskilledlabour(Shutt andCheng, 2009).The current issue and full text archiveof this journalis availableatwww.emeraldinsight.com/1756-1396.htmJCE3,124Received 6 September 2010Reviewed10 September 2010Accepted 30 September 2010Journal of Chinese EntrepreneurshipVol. 3 No. 1, 2011pp. 24-35qEmerald Group Publishing Limited1756-1396DOI 10.1108/17561391111106007Downloaded by FUDAN UNIVERSITY At 19:03 04 May 2015 (PT)Talent managementas anemerging issuein ChinaExacerbating shortages of managerial talent andaggravatingpressures of ercecompetition have helped fuel a global interest in human capital theory in the context ofthe development of the knowledge economy, but research on human capital theory andpractice in China has only recently begun as China places more importance oninformation and communications technology, education, science and technology and aservice-based economy (Chi, 2008; Zhao, 2008). Large regional differences, imbalancedeconomic development, a lower quality of current human capital, an incomplete marketsystem, anunder-developedmanagerial labourmarket andalackof innovationinhumanresourcemanagement(HRM) arebarrierstomakingasuccessful transition,though recent research on talent management (TM) in China has begun (Iles et al., 2010;Preece et al., 2011; Hartmann et al., 2010).AttractingtalenttoplaceslikeShenzenhasbeenkeytoChinasdevelopment, yetChina lacks managerial andprofessional/technical talent inparticular. The talentshortageinChinaiswidelypredictedtobeoneofthegreatestchallengesfacedbyorganizations (Iles et al., 2010; Hartmann et al., 2010). Research by McKinsey has shownthat Chinese companies need many more globally effective leaders to realise their globalambitions than they possess at present. Many current leaders, brought up in the culturalrevolution, may lack critical knowledge, skills and experience in strategy, innovation,enterprise and empowerment. Younger leaders may lack people skills, but despite higheducation levels may have received little management training (Wilson, 2008). Turnoverin this group is often high, and expatriates continue to ll many capability gaps, withincreasing use of managers fromthe Asia-Pacic region and foreign-born Chinese. Thisshort-term solution, however, creates longer term problems, such as high expense, theneed for localisation and the grooming of local staff, against a common perception ofemerging glass ceilings by local Chinese staff.Other researches of McKinsey have specically addressed the issue of growing talentshortages in China and the imbalance between business opportunities and the supply ofqualied managers and executives. This growing need for talented managers is a majorchallenge to bothmultinationals andlocal businesses, withrecruitment a major challenge.A total of 44 per cent of Chinese executives in a recent survey reported that insufcienttalentwasamajorbarriertoexpansion; continuedgrowthwillincreasedemandsfortalent at a time when multinationals are increasingly competing with local state-ownedand private rms for scarce talent in the same talent pool (Lane and Pollner, 2008).Chinese companies in these surveys worried about managerial capabilities,increasinglylookingabroadtorecruittalent; 43percentofexecutivesexpectedtheproportion of foreign managers at senior levels to increase over the next three years, with67 per cent expecting increases at lower levels. Many talented Chinese live and workabroad, especially after graduation in foreign countries, contributing to a brain drainor knowledge diaspora (Tung, 2008). In a recent study, conducted by Mercer,72 per cent of respondents in China claimed that their main challenge in staff recruitmentwas a lack of qualied candidates in the labour market. A key issue was also how todevelopandretainstaff, makingmanagement andleadershipdevelopment of localstaffinparticularapriority(Wilson, 2008).However,manycompaniesinChinalackcommitment to developa comprehensive leadershipdevelopment strategy, or theexpertise to implement one: talent development cannot keep pace with businessdevelopmentinChina(QiaoandXuejun,2008). SuccessionplanningoftenseemsnotTM inZhejiangProvince25Downloaded by FUDAN UNIVERSITY At 19:03 04 May 2015 (PT)tobe workingwell, due toashortage of talent readytoll leadershippositions,fast-changing and volatile markets and the inated expectations of those identied astalented. Short-term business goals often conict with long-term talent developmentobjectives. Talent readiness may be seen as a key issue by CEOs, line managers andhigh potentials themselves, but not necessarily by HR staff.TMinChinaingeneral isanunder-researchedarea, thoughaNational TalentWorking Meeting in Beijing in 2003 was organized by the central government to covertalent-relatedpolicies, symbolizingthat TMhasbeguntobewidelydiscussedandpractised in China. Recent research by Iles et al. (2010) and Preece et al. (2011) shows thatTMhasbecomeakeyissueformanymultinational companies(MNCs) inBeijing.Though denitions of TM differed, some focused on ensuring a smooth continuity oftalent ows inthe company, others onenhancingorganizational competence andcapability, yet othersonwinningthewarfortalentbyensuringtherecruitment,selection and retention of talented employees; they all sawTMas a key issue for HRMinChina. For some, TMwas a part of HRM, but for others, it represented a radical departurefromHRM, breaking withthe egalitarianism of HRMbysegmentingthe workforce andtreating those in the talent pool in a more targeted way in terms of training, reward,development and retention efforts. Most denied that TM was just a fashion, or that theyweresimplyimitatingother companies; thoughsomeacknowledgedsomeexternalpressures (e.g. fromcentral government or overseas head ofces), they claimed that theyhadintroducedTMprogrammesprimarilyinresponsetorealbusinesschallenges,in particular their pressing needs to recruit, retain and develop a talented workforce.Hartmann et al. (2010) conrmed that one of the greatest challenges facing westernMNCs in China was nding talented people to run their businesses. Using qualitativedatafromsevenShanghai casestudies, theyfoundthat their WesternMNCshadgenerally transferred their TMpractices aimed at identifying, developing and retainingtalented employees to China without much modication (a similar nding to Gamble(2006) ina UKretail company in Shanghai). Their main focus was ondeveloping talentedemployees and creating a talent-focussedorganizational culture. However, integratedandstrategicTMstrategieshadnotyetbeenfullyimplemented; thecompanieshadnotfullyinternalisedtheirtalentidentication, development, succession, mentoring,visibility and leadership development/culture programmes. To build loyalty andcommitment, sportsandsocial eventswereoftenused, reectingtheimportanceofmore collectivist Confucian values in China (Yolles and Iles, 2006) in culture-buildingprogrammes aimed at enhancing employee commitment and engagement. Developmentin larger companies was largely through internal training academies, designed to buildinternal talent pools in the long term. These were sometimes associated with overseasassignments to build commitment and build and transfer knowledge. Such activities hadbeen implemented over the last decade, indicating the exibility MNCs now had whenoperating in China. However, little effort was being made to identify talent and enhanceits visibility in the organization, and surprisingly, little account was being taken over thedifculties companies might encounter inreplacing certainemployees amidst a dynamiclabour market. Onlythree companies identiedpivotal talent pools andcodiedinternal talent; surprising, as Chinese employees tendtoleave if theydonot seedevelopment opportunities (Tung, 2008).Suchlimitedstudiesof TMinChinahavefocusedonWesternMNCsinBeijingor Shanghai; we have little informationonhowlocal Chinese private companies,JCE3,126Downloaded by FUDAN UNIVERSITY At 19:03 04 May 2015 (PT)especially small/medium sized enterprises, practise TM, particularly in other areas ofthe country such as Zhejiang Province.Thesupplyofgraduate talent inChinaA rapid increase in the number of Chinese university places in recent years has beenaccompanied bydeclining numbers of college leavers who regard themselves as suitablyemployed. In 2008, there was a record of 5.6 m graduates, nearly 650,000 more than theyear before. Another 6.1 mwill graduate in 2009. Around 1.7 mwere, however, unable tond work. This high rate of graduate unemployment is mainly due to rapid structuralchangesintheeconomy, whichtheeducationsystemcannot keepupwith. Astheeconomy fast changes to adapt to the international economic climate, the labour marketskills demandchanges andthe graduates mayndthemselves unable to matchemployers skills demands.Thereis oftenamismatchbetween thegraduatessuppliedby Chineseuniversitiesandtheskillsandattributesrequiredbyemployers. Thoserecruitedoftenhavehighexpectations, whichifnotmetmayleadtohighturnover. Velde(2009) exploredthealignment of graduate outcomes with employer demand in a study of a vocational collegeincentral Shanghai, identifyingfuturetrendsfromstudent, graduateandemployerand academic perspectives.Employers claimedthat positiveattitudes and behaviours(cooperating, resolving conicts, adaptability, taking responsibility, effectivecommunicationinEnglishandcommitment tocontinuouslearning) wereextremelyimportant characteristics in graduates, perhaps showing inuences fromboth commandand market systems. Employers, however, had generally low expectations of the typesof skills graduates would possess. The overall conclusion was that there was a wideninggapbetween howMNCs andstate/private Chinese enterprises used the education system.Employability is, therefore, a critical requirement both for organizations, includingChinese companies, competing in a changing global environment and for individuals,suchasgraduates, seekingtomakesuccessful careersandtocontinuouslyacquireorcreate, inanentrepreneurialway, fulllingworkthroughtheoptimaluseoftheirskills and competencies (Nauta et al., 2009). Highly employable individuals can enableorganizations to meet uctuating global demands for goods and services by adoptingnewroles andacquiringnewskills. Graduates andemployees, therefore, needtodevelop an employability orientation so that they are more open to self-developmentand adaptable to newwork requirements to seek more boundaryless careers that crossorganizational, functional and national boundaries.Organizations, includinguniversities, also needto stimulate employabilitybycreatingan employability culture that supports graduates and employees in life-long learningandcontinuousprofessionaldevelopment(CPD), encouragingadaptability, exibility,change and the search for new career and entrepreneurial opportunities. Employabilitymay be enhanced by developing employee self-efcacy (condence in performing tasks),role breadth self-efcacy and a high employability orientation (Poole and Sewell, 2007).In addition, entrepreneurship has also been given emphasis in China in recent years,especially after Chinas accession to the WTO(Iles and Yolles, 2006). Strategicentrepreneurship, such as resourceful innovation, proactive change and adaptivecapability, positivelyaffectsrmperformance, aswellasperformancemanagement.However, thisvariesacrossregions; therelationshipisstrongerforrmslocatedinthe eastern region, such as in Zhejiang province (Wang and Wang, 2008).TM inZhejiangProvince27Downloaded by FUDAN UNIVERSITY At 19:03 04 May 2015 (PT)Talent demandandTM inHangzhou: company casestudiesInordertoanalysetheseissuesofgraduateemployability, talentdemandandtalentsupply, wecarriedouttwostudiesinChina. Onewasasurveyofuniversityalumnicareer experiences and aspirations; this is not the subject of the present paper. The otherwas a series of interviews with companies in the Hangzhou area, drawn from differentsectors, exploringtheirskillneeds, talentdemandsandexperienceofgraduatesandrelationships with universities (see Appendix for a current list of companies and for themethodology employed). The objectives were:(1) to assess companydemands for skillsand talent, and how thesehad changedover time;(2) to assess company experience of graduate talent supply and what was lackingin graduate skillsand employability;(3) to evaluate how graduates were recruited;(4) to identify what further training and development graduates needed, and howthis was delivered; and(5) to assess the quality of relationships between the company and localuniversities, and how these could be improved.In general, the company surveys revealed a strongneed for people who can operate in thecomplexinternational economy, requiringhighlevels of abstraction, cultural andbusinesscultureawarenessandcommunicationskills. Surveycompaniesingeneralshowed a strong preference for training in the context of real work to develop practicalskills. Most companies complained that graduates needed more training, as at universitythey did not develop the skills needed in the work place, appreciate the meaning of workor developworkethics. Most companies sawthe needfor CPDtoenhance workeffectiveness and quality.For example, the CITIC Bank, the sixth largest bank in China, recruited at the primarylevel mainly undergraduates in nance-related subjects, with training delivered in-house.With over 20 banks nowin the country, newskills can also be obtained fromrecruitmentfromother competitors. Management staff may also be recruited fromother banks, but italso recruits Mastersstudents,mainly by theBeijinghead ofce. Students could havecertication in a variety of subjects, and they then received bank-based training. Chinesebanks are still very oriented around savings and borrowings, and risk averse, so training,otherthantodothejob, isnotthatmuchofapriority. CITICidentieditstrainingrequirementsat threedifferent levels: primary(tellers), management andhighlevel(directors). All types of training, including CPD, e.g. risk management, are provided byheadquarters in Beijing. The bank is currently evaluating what and howmuch training isneeded for its future requirements. Currently, much of the training is mainly conductedin-housebecauseofalackofevaluationsystemsoffutureskillsneeds, whichmakestraining ad hoc, only brought in when performance needs to be improved. CITIC bank feltthat local universities providedthe basic undergraduateskillsandknowledge theyrequired, but this didnot meet all their needs as traininginspecic skills, e.g. primaryleveltelling skills, are not addressed. They would prefer to turn to universities to meet theirneeds at the primary level, but they feel that these skills are better obtained at present bytheinternet orbyreadingbooks. TMisnot reallyaddressed, at management level;managers are merely moved around to get different types of experience.JCE3,128Downloaded by FUDAN UNIVERSITY At 19:03 04 May 2015 (PT)Looking forward, the banking sector is still not completely deregulated, and foreignbankcompletionisrelativelysmall; thisalmost encouragesareactiveapproachtotraining and a tendency to accept the status quo. But deregulation may come, and therehas been a rapid increase in the number of banks over the last ten years. This makes thebankfeel that it will requirenewskills, especiallymarketing, advertising, productdevelopment and promotion. If it has a training problem or need, it currently turns toheadquarters. Thebankisinterestedinworkingwiththelocal, nationalandmaybeforeign universities to provide certication and CPD so as to meet its current and futuretraining needs.The lackof talentedmanagersin China is amajoroperational problem forforeigncompanies operating in China, whilst for Chinese companies, it is a barrier to their globalexpansion. SupconGroupCo. Ltd, foundedin1993asanoutgrowthof researchatZhejiang University of Technology and specialising in process automation, public worksandequipmentautomation, undertakesmanagementtrainingwithZhejiangBusinessSchoolandUniversity. Itseesitsmajortasksasbeingdevelopingitsmarketingandbrand, developingintoaglobal companyanddevelopingitsmissionandbusinessstrategyso that it cancompete with ABBandSEIMENS, for example, onthe global stage.Similar internationalisation issues apply to Zhejiang Asuka Home Textiles Co. Ltd,a large enterprise in Hangzhou specialising in the manufacturing, selling and trading ofhometextilesanddownproducts. ItsbrandnameAsukaisoneoftheleadinghometextilescompaniesofChina, andithas200in-storeshopsall overChina. Itsmajorexports markets are Japan and Russia, though up to 70 per cent of sales are domestic.Asuka is focussing on developing its marketing and sales channels and brand. Its mainissuesaredevelopingdesigncapabilityandTM. It hasdevelopedalinkwiththeShanghai Textile Universityandhas joint ventures withZhejiangUniversityArtCollege but its links with Universities are not strong. The company has a strong interestin developing a capability to enter European markets, in particular UK, Germany andFrance, but is still at the exploration stage in terms of information gathering.Similar issues confront The Xizi Group, Xizi United Holding Corporation, formed in1997 as an elevator company Otis Ju, but venturing into property development with thedevelopment of the Hangzhou shopping mall as a public company in 2006. The companyis expanding is Southeast Asia-Vietnam, India, Thailand and Indonesia and, therefore,needs to be able to tap into a talent pool responsive to the legal and cultural issues; it sellsitsproductsintheUSA, Japan, Thailand,IndiaandBrazil. Thiscompanyhastakenmore proactive steps in TM. It employs 7,000 people in Zhejiang Province; it is a fastgrowing large enterprise and is in the top 50 most competitive Chinese privateenterprises. The company has a Research Institute-Xizi Research Institute involved inaerospace, solar and wind technologies as well as the core technologies of boilers andelevators and the Xizi United University, which is the centre of its skills and TMstrategyand promotes open study, open communication. It uses the Xizi University for frontline management and apprenticeship training and middle management training. Its ownskill needs are language skills, analysis and decision-making skillsand the ability tocopewithgrowth. Seniormanagementisencouragedtodotraining, butthisisnotconsistently applied.In general, companies perceived an imbalance between the supply and the demand ofskillsintheHangzhoueconomyandanongoingmismatchbetweenthesupplyofgraduatesinthelabourmarketandthetypeofcandidatewhowouldinterestlocal,TM inZhejiangProvince29Downloaded by FUDAN UNIVERSITY At 19:03 04 May 2015 (PT)regional and, especially, MNCs. For example, Xizi did not see the Hangzhou Universitiesas being well equipped to deal with industry needs; nor did Zhejiang Textiles Importand Export Group Co Ltd, Zhejiang Yuyang International Trading Co Ltd, Hangzhou(a branchof ZhejiangTextiles I/EGroupCorp. Zhejiang). LocatedinHangzhou,it specializes infunctional fabrics. Howtondreal talent ingraduates, andhowtopersuade themtostay, is areal challenge; the current downturnhas affectedemploymentprospectsand training budgets. Employees needed an understanding ofinternational trade theories and how to nd emerging clients and markets, as well asnewcustomers, commodity markets and service supply. Communicating with clients isalso important; understanding foreign languages, the fabric/textile industry, theproduction process and foreign exchange are all necessary.Several yearsago, it recruitedgraduatesfromacrossChina, but nowit mainlyrecruitslocalgraduatesfromlocaluniversities. Atotalof90percentofrecruitsaregraduates, but turnover is high; 30 per cent leave after one year, either for reasons ofpromotion or because they do not suit the work. They have employed foreign-educatedgraduates, but see no obvious difference intheir work; bothtypes of graduates needmorepractical work experience and training. Graduates need language and communicationskills, especially English, andfamiliarity with textiles and skills inrelating to customers;legal and nancial skills are also necessary.The group arranges a training plan for new recruits; for the rst week, training isfocussed on company policies, commodities and trade practices. As well as class lessons,trainees do some practical work in other factories. The company encourages people totake courses, such as MBA. If the company arranges the course, it will pay, but not if theindividual arranges it, though it will part-fund it if the student gains honours.Overtenyearsago, thecompanybegantoattract peoplefromotherindustries,including professors, but supply was greater than demand. Excellent, talentedemployeesareencouragedtostayandreceiveperformance-relatedpayaswell astheirsalary. Thecompanytriestomakenewrecruitsfell that theyarepart of theteam.Whenstudents graduate, it seeks opportunities togive informationtothemon the company and introduce themto classmates. They sawa need to effectively bridgethe company/university gap, perhaps through greater use of work experience, part-timejobs and better communication with the enterprises.Shinyway Overseas Studies: Kaplin Shinyway Pathway College, the largesteducational agencywiththe longest historyinChinaandone of the rst overseasstudies agencies accredited by the Ministry of Education of China, has helpedmore than 15,000 students realize their dreams to study abroad during the past 11 years.Their primarycountrychoicesaretheUSA, theUK, Australiaandother countries:TheNetherlandsandIreland in Europe, andJapanand SingaporeinAsia. Theaimofthe company is care about every step of students growth. Zhejiang Universityof Technology (ZJUT) students may use their services; the UKadvantage was the one-yearMasters, the USAscholarships, Australia visas. The companyhas more than200employeesinZhejiangand456inChina. ItneedsemployeeswithverygoodEnglish,excellent communicationskills andpositive attitudes toworkandchallenge; different skillswere needed for different jobs and levels, especially professional skills. The company hasfaced major economic challenges, as it was a fast-developing company. Employees neededto know how markets worked and how to design and organize; international experiencewasanadvantage. Itsskill needsarenot satisedbythecityseducationprovision.JCE3,130Downloaded by FUDAN UNIVERSITY At 19:03 04 May 2015 (PT)Most employees were educatedoverseas, returningto China andtheyhadseveraladvantages: a relevant educational background, and a more active, condent, courageousandingenious character thanlocal graduates. Theyenteredat a lowlevel, but might go intohigher levels if they had previous work experience.Eachdepartment reportedto the HRdepartment their skill needs andthe kinds of peopletheyneeded. Theyusedin-houserecruitment, theinternetandbroadcastingmedia; atmanagerial levels, they used search consultancies. They may recruit ten to 20 graduates inZhejiangprovince; this year, theyrecruited50 inChina. Trainingis giveninskills, companyculture, career planningandcreatinga professional development plan. Leaders also trainedemployees in company culture; experts trained people in professional skills. These courseswere designed in-house by the HR department. The company funded higher degrees andencouraged employees to take higher qualications with nancial assistance.Performance was reviewed in terms of salary and bonus, depending on many factorsrelatedto workeffectiveness andsocial contributionandwas assessedbyclientsatisfaction. Normal turnover was 5 per cent; at management levels, there were talentshortages as managers needed to knowabout both education and management, and thisbalance was difcult to nd. Recommendations fromemployees were the usual channelused. They wanted students with broader international insight and a positive attitude,sales and marketing skills and English. Graduates were, however often too demanding.Inasimilarservicessector, YuyangIPwasestablishedin2000asaprofessionalagencyengagedinallaspectsoflegalaffairsrelatingtointellectualproperty. Ithasdeveloped rapidly and now provides a comprehensive IP service. It has 60 employees,and some have moved to new ofces; it had recruited ten in the last two months. Themajor challenges faced by the company were recruiting international human resources;it dealt with international IP and was a global business, working in the EU, USA andeastern Asia. Its main business partners are fromthe UK, (it has a local partner in Leeds),the USA, Japan, Korea, Germany, France, Hong Kong, Taiwan and Macao.Locally educated recruits were not seen as useful, as employees needed language skills(not just Englishbut alsoFrenchandGerman) aswell aslegal skills, especiallyininternational lawandtrademarks. Most graduatescameinat alowlevel, requiringtraining.It was hardto ndexperienced IP attorneys, and they usually recruited newgraduates frommanydifferent universities, but not usuallyfromHangzhou, as these wereoften very demanding in terms of salaries, and their skills and professional knowledgewere lacking. They used employer recommendations and HR consultancies forrecruitment. There was less need for nance or marketing skills for legal staff, but therewas a need for business staff. There was also a general need for people/communicationskills. The company sees a need for CPD provision and training relating to every aspectof work, especiallyabout IP. Its personal development department of volunteers organizesmany activities (e.g. how to dress, how to communicate and how to make presentations)asthisareawasoftenlackinginChineseeducation. Thecompanyofteninvitessomeexperts to give management training for department heads and managers or leaders canalso take part in courses in Hangzhou.Employees were developed through job rotation and coaching; conferences were alsoused, butnottrainingcourses. TherewasalsoaHangzhouoverseasreturneesclubwhich was used for recruitment. In the future, the company would need more westerneducatedemployees as it grewandincreasedits market share. CPDwas needed,especiallyintheareasofprofessionalskills; internationalbusinesspartnerscametoTM inZhejiangProvince31Downloaded by FUDAN UNIVERSITY At 19:03 04 May 2015 (PT)teachone-day courses, but not often. It mainly recruited graduates, not usually local,fromdifferent collegesanduniversitiesinHangzhou, sometimesfromjobfairsorthroughrecommendationsbyemployees friends, andtrainedthemin-house,astheyoften did not have professional work experience. The training often took two weeks toone month. Most employees had bachelors degrees; a few had Masters degrees.With growing internationalization, the company will employ some western educatedgraduates; however, theymayaskformoremoney. Whenemployeesachievetheirdepartment objectives, they receive a salary. If they have shown excellent performance,they can also receive a bonus. If they are loyal to the company and have worked for veyears in it, they may get extra rewards called housing funds.Similar issuesarisewithZhejiangHongyi GroupCo. Ltd, XiaoshanHangzhou,established in 1994, but now among the top 500 companies in China, 4,700 workers areemployed at the headquarters inXiao Shan; along with the company in Shanghai and thefactory in Ningbo, 5,700 workers are employed in the whole group. Because the mainproductsarebasicfabricmaterials, itscustomersareexportingfactories. Withtheinternational economic crisis, exports have decreased, reducing group sales. The groupsfabric material price uctuates, as its basic material comes from oil, and the oil pricevaries at different times. The group must, therefore, solve problems of stock and storage;if material is kept too long, it loses money.Recruitment is carried out using many methods, going into schools, using the internetandemployingnewspaper advertisements. For high-level workers, it usesinternetsearch, as well as poaching from competitors. The company has specic problems inrecruitingtechnicians; skillsshortagesalsoexist insomeprofessional specialisms.These employees are usually recruited from competitors. They tend to retain talentedworkersthroughhighsalariesandencourageyoungerworkerstobuyhomeswithlow-interest loans, as it is hard to buy a home in Hangzhou. The company tries to providecareer development andprofessional development opportunities andtraintalentedpeople for future opportunities. Before 2003, most senior management came fromwithinthecompanyusinginternallabourmarkets; after2003, exceptforthechairmanandgeneral manager, most wererecruitedfromtheexternal labour market. Of middlemanagers, 40percenthavebeenrecruitedfromoutsidethecompany. Before2003,quality was lower, and the factory was labour intensive; now, especially in the Ningbofactory, the supply of existing workers is insufcient to meet demand for talent.The skill needs of the company are related to its overall business strategy; it wantsto develop as a technology and capital-intensive company, away frombeing alow-skilled, labour-intensive company. It nowemploys fewer workers; its Ningbo factoryemploys higher skilled labour. It is paying more attention to higher level skills; it needschemical engineering and mechanical engineering talents, as well as nance andinvestment skills.The company is not satised with educational provision as many students straightfromuniversity are not suited to the working environment. Workers in labour-intensivedepartments are trainedover several months; after training, theycanoperate themachinery and equipment. For graduates, education at university only helps them toacquire knowledge, not the ability to work. This is acquired through the workposition; forhigh-level positions, employeesneedtobetrainedforuptooneyear.TheNingbofactoryinparticularrequireshigh-leveltalents,oftenrecruitedfromthewider petrochemical industry. The Group is now in a position to train people itself.JCE3,132Downloaded by FUDAN UNIVERSITY At 19:03 04 May 2015 (PT)Mostworkersarefromhighschool; inNingbo, administratorsaregraduates, andsome workers in the research department need to be post-graduates. Western educatedgraduates have no obvious advantages except in terms of communication withforeigners. Theydonotspecicallyhirethem, thoughtheydidrecentlyhireaHongKong graduate who had worked for BP. Two employees in the trade department hadrecently returned from the UK.Graduates needed instruction to become full-edged workers, as in university, they didnot learnhowtodothings, themeaningof workandworkgoals. CPDprovisionisnecessarytoenhanceworkeffectivenessandquality. Newworkershaveapre-workbrieng to change their status from student to worker; work leaders are responsible forhelping workers ndanswers to problems, enhance quality and help promote the abilityofworkers andthe right attitudes. For the excellent 20per cent, the groupwill offeropportunities to develop skills for future higher level positions through a training plan.Training is carried out externally and internally; Japanese technicians have been used tointroducethelatest techniquesandtrendstotechnicians. Thegroupwill alsoinviteprofessors fromPeking, Tsinghua and Zhejiang universities to help spread newmanagement principles andwill invite experts intechnologyto teachthe latest technology.SummaryHangzhou, and China at large, presents the dual challenges of aggressivebusiness-buildinggoalsandaninsufcientpooloftalenttoachievethem. Ingeneral,the companysurveys revealeda strongneedfor graduates who canoperate inthe complexinternational economy, requiring high levels of abstraction, cultural and business cultureawareness, and communication/teamwork skills. A strong preference for training in thecontext of real work to develop practical skills was also a high priority. Most companiescomplained that graduates needed more in-house training, as at university they did notdevelop the practical skills and attitudes needed inthe work place, appreciate the meaningof work or develop work ethics. Most companies saw the need for CPD to enhance workeffectiveness andquality. The lackof functional skills ingraduates is a general problem, astalent needs might be different. Managers in China need to knowhowto simplify or tailorproduction, ndlow-capitalsolutions, managealliancesandgovernmentrelationshipsand display cultural openness to become more global players. As the systemisincreasinglyderegulated and companies strive to internationalise, newskills, especially inmarketing, advertising, product development and promotion are needed. However,universities at present are seen as less equipped to meet future skills needs and to someextent, their present practical skills needs, being too theoretically oriented.The surveys have revealed a need for closer collaboration between universities andbusiness to ensure a good t between teaching, the peculiarities of the changing localtalent market andtherapidpaceof change. Thisrequiresapartnershipapproachbetweeninstitutionsofhigherlearningandtheeconomy, wherebycompaniesbuildrelationships with universities to improve the teaching and curricula by adapting thelatter to the needs and direction of the business environment. Where it exists, the currentrelationships seem based on alumni of the university.The basic messages from the survey interviews are:.Local universities provide good undergraduate feedstock at the primarylevel, butthecompanieshavetoprovidethepractical trainingrequiredtodothejob.TM inZhejiangProvince33Downloaded by FUDAN UNIVERSITY At 19:03 04 May 2015 (PT).Atmanagementandhigherlevels, anyMastersdegreemaysufce(mainlyinbusiness or related subjects), and training is provided in-house or by in the jobtraining..At management andhigherlevels, recruitingfromcompetitorsseemsagoodway of providing for skills shortages..Currenttrainingprovision is currentlyratheradhoc,rather than strategic..A vocationally focussed further education sector, including a university sectormore oriented to employability,appearsa necessity.ReferencesChi, W. (2008), The role of humancapital inChinas economic development: reviewandnew evidence,China EconomicReview, Vol. 19, pp. 421-36.Gamble, J. 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(2008), Application of human capital theory in China in the context of the knowledgeeconomy, International Journal of Human Resource Management, Vol. 19 No. 5, pp. 812-17.Appendix.Companycase studies(1) Supcon Group Co. Ltd.(2) Zhejiang Hongyi Group Co. Ltd, Xiaoshan Hangzhou.(3) CITIC Bank.(4) Xizi Group, Xizi United Holding Corporation.(5) ZhejiangTextilesImport andExport GroupCoLtd, ZhejiangYuyangInternationalTrading Co Ltd, Hangzhou.(6) Shinyway Overseas Studies: Kaplin Shinyway Pathway College Zhejiang.(7) Yuyang Intellectual Property Agency Co. Ltd.(8) Zhejiang Asuka Home Textiles Co. Ltd.Ineachcase, aninterviewwas heldwitha senior manager bya researcher fromLeeds MetropolitanUniversity, accompanied by a translator from ZJUT (a PhD student or staff member). The topicscovered were graduate recruitment and training, training and retention issues, TM, skill needs andthe extent to which these were met by local university provision. Interviewees were also askedaboutanypartnershipswithZJUTandanyrecommendationstheymighthaveforimprovinguniversity-employer links.About the authorsXiaoxianZhuisadoctoral studentatLeedsBusinessSchool, LeedsMetropolitanUniversity,where she has just begun a PhDin Economics and Human Resources Management. Xiaoxian Zhuis an Assistant to the PMI2 British Council partnership, Leeds Metropolitan University/ZhejiangUniversityofTechnology. PreviouslyshewasawardedaMastersinInternationalTradeandFinancebyLeedsMetropolitanUniversity, havingobtainedaBAdegreemajoringinEnglishLiteraturefromBeijingForeignStudiesUniversity. ShehasalsoworkedasaPAandasaMarketing and Customer Service Executive at the Porsche Center, Hangzhou.Paul Iles is a Professor of Leadership and HRM at Salford Business School, the University ofSalford, and was previously at Leeds Business School. Paul is a Chartered Psychologist, AssociateFellow of the British Psychological Society and Chartered Fellow of the CIPD. He has a particularinterest in leadership development, coaching and talent management and has published a numberof articles inrecent years, includingseveral recent articles ontalent management inChina. Paul Ilesis the corresponding author andcan be contacted at: p.a.iles@salford.ac.ukJohn Shutt is a Running StreamProfessor of Employment and Regional Development at LeedsBusiness School, Leeds MetropolitanUniversityandis Director of the EuropeanRegionalBusiness and Economic Development Unit at Leeds Metropolitan University. He has a particularinterest in regional economic development, and is the Project Leader for the PMI2 project betweenLeeds Metropolitan University and the Zhejiang University of Technology.TM inZhejiangProvince35To purchase reprints of this article please e-mail:reprints@emeraldinsight.comOr visit our web site for further details: www.emeraldinsight.com/reprintsDownloaded by FUDAN UNIVERSITY At 19:03 04 May 2015 (PT)This article has been cited by:1. DeniseJackson.2014.Businessgraduateperformanceinoralcommunicationskillsandstrategiesforimprovement. The International Journal of Management Education 12, 22-34. [CrossRef]2. Jackson Denise, Sibson Ruth, Riebe Linda. 2014. Undergraduate perceptions of the development of team-working skills. Education + Training 56:1, 7-20. [Abstract] [Full Text] [PDF]3. XiaobingZhang,XinZou.2013.UniversityStudentsEmployabilitySkillsModelBasedonChineseEmployer Perspective. Journal of Human Resource and Sustainability Studies 01, 29-33. [CrossRef]Downloaded by FUDAN UNIVERSITY At 19:03 04 May 2015 (PT)